Rural Riddle: Do Jobs Follow Broadband Access?

In Rose Hill, at Virginia's southwest corner, no companies have moved in and just a few people have started home businesses since high-speed Internet lines were installed.
(Photos By Wade Payne For The Washington Post)

In the southwest corner of Virginia, where tobacco farms meet the Appalachian Mountains, two towns desperately in need of an economic boost were given what many had hoped would be a kick-start: access to high-speed Internet.

But there the paths of Lebanon and Rose Hill diverged. One attracted two large companies that created 700 good-paying jobs for residents. In the other, only a few home-based businesses got off the ground.

President Obama has touted broadband as a means toward transforming rural and low-income areas, setting aside $7.2 billion in the stimulus plan to help create jobs and close the "digital divide." He has been joined in his support by a chorus of countries, including Australia, which recently said it would spend $31 billion laying fiber and other networks to get ahead in an emerging high-tech global economy.

Despite the support for publicly funded broadband networks -- and the push by private companies to jump into the fray -- some have questioned whether bringing high-speed Internet has a direct effect on jobs and the economy.

Many high-tech companies have heralded a January report by the Information Technology and Innovation Foundation, a research organization, that stated that an investment of $10 billion in broadband networks across the country would create nearly 500,000 jobs, including the hard-hat jobs digging trenches and laying fiber lines. Other positions would come from businesses that rise from high-tech innovation and better productivity, the report said.

But some economists have questioned such predictions, saying that bringing high-speed Internet to rural areas is much more complicated.

"For the idea that some sort of magical economic development will occur, there is no evidence that that can happen," said Robert W. Crandall, a senior fellow at the Brookings Institution who has studied the issue.

Some potential subscribers may not see the benefit of getting online, while others may not be able to afford the monthly service fees. Residents with limited exposure to technology and low education levels may struggle to meet the job qualifications of tech-sector positions.

"You can't just drop an Internet line and expect jobs growth. Getting broadband access is only the first part," said Larry Irving, former head of the National Telecommunications and Information Administration.

Supporters of broadband as a way to jump-start an economy cite Lebanon as an example of how technology can change a town. High-speed Internet came three years ago after Rep. Rick Boucher (D-Va.), and Mark R. Warner, then governor, helped get $2.3 million in grants to bring fiber-optic pipes to homes and business parks.

The defense contractor Northrop Grumman and the software maker CGI set up facilities and created jobs for about 700 people, with salaries averaging $50,000 a year, Boucher said.

It helped that district planners at the same time converted an old strip mall to a training center that allowed residents to get their high school equivalency diplomas and prepare for jobs as technicians and information technology workers.